September 1999

Arbitration

Where a contract provided for arbitration of any claim, controversy or dispute
between the parties, and one party sued the other for fraud in the inducement and
breach of contract and other claims, all claims had to be submitted to arbitration, even
the fraud in the inducement claim. Does this mean you are not entitled to litigate the
issue of whether you were fraudulently induced to enter into the agreement to arbitrate?

Collateral Estoppel

The issue of whether the plaintiff was an employee was litigated in the underlying
personal injury lawsuit, in connection with a workers compensation defense. The
defendants general liability insurer brought a dec action against the
defendants workers comp and employer liability insurers for a determination of
duty to defend and indemnify the insured. The trial court properly held that the
determination of the employment status in the underlying trial collaterally estopped the
insurers from relitigating the issue in the dec action. The doctrine of collateral
estoppel applies to an insurer which is in privity with its insured and whose interests
were not antagonistic to the insured's in the underlying suit. The insurer was present at
the underlying suit where the issue was litigated and provided argument in support of the
insureds position, so it is bound by the original determination.

Insurance  Appraisal

Overruling a number of prior decisions, the court en banc holds that, where a property
insurance policy contains an appraisal clause, the insured must comply with all of the
policys post-loss obligations before the appraisal clause is triggered. Until the
insured has done this, the Court may not compel appraisal.

Insurance  UM

The insured was entitled to UM coverage where he was injured by a bus owned by the
Pinellas Suncoast Transit Authority. The UM policy purported to exclude vehicles owned by
government entities or by self-insurers. The court held that the UM statute does not
permit exclusion of vehicles owned by government entities. Moreover, the Transit Authority
was not a self insurer where it had not obtained a certificate of self insurance. The
Transit authority had a policy of $2 million with a $100,000 deductible, but it was not
payable unless the claimant obtained a claims bill from the legislature.

Med Mal

After the decision in Jaar v. University of Miami, 474 So.2d 239 (Fla. 3d DCA
1985), the university and JMH modified their affiliation agreement to try to shield the
university from liability for any malpractice committed by its faculty physicians at JMH.
The affiliation agreement now provides that the University shall permit its faculty
physicians to apply to the Trust for staff privileges and to contract with the Trust
individually. Distinguishing Jaar, the court holds that the university cannot be
held liable for the actions of two faculty physicians serving on a hospital committee that
promulgated emergency room protocol. The court upholds summary judgment for the
university.

New Trial

Brown v. Estate of Stuckey
24 Fla. L. Weekly S397 (Fla. 1999)

Once again the Supreme Court tries to bring light to the foggy issue of the standard
for review of an order granting a motion for new trial based on a finding that the verdict
is contrary to the manifest weight of the evidence.

The trial judge has broad discretion to grant a new trial to avoid what, in the
judges trained and experienced judgment, is an unjust verdict. An order
granting new trial should not be disturbed except upon a clear showing of abuse. The trial
court should grant a new trial when the jury has been deceived as to the force and
credibility of the evidence or has been influenced by considerations outside the
record. When the trial judge grants the motion for a new trial, he or she must
articulate the reasons for a new trial in the order. When reviewing the order, the
appellate court must recognize the broad discretionary authority of the trial judge and
apply the reasonableness test to determine whether the trial judge committed an abuse of
discretion. The presence of substantial competent evidence in the record to support the
jury verdict does not necessarily demonstrate that the trial judge abused his or her
discretion.

A new trial may be ordered on the grounds that the verdict is excessive or inadequate
when (1) the verdict shocks the judicial conscience or (2) the jury has been unduly
influenced by passion or prejudice. The procedure under §768.74 for remittitur and
additur apply only upon the proper motion of a party.

Nursing Home

The nursing home statute is upheld here against a challenge that it is
unconstitutionally vague and an improper delegation of legislative authority to the Agency
for Health Care Administration. (How vague is dont abuse old people?)

The court also holds that it was error to include on the verdict form the V.A. hospital
at which the decedent was treated after the nursing home abuse, because the hospital was
not a joint tortfeasor, but a successor tortfeasor. Therefore, the plaintiff was entitled
to recover his entire damages from the nursing home, the initial tortfeasor. See Stuart
v. Hertz Corp., 351 So.2d 703 (Fla. 1977).

Offer of Judgment / Proposal for Settlement

I guess this is why they now call it a proposal for settlement instead of
an offer of judgment. The court holds that, where the defendant made a proposal for
settlement under Rule 1.442 and §768.79, and the offer did not specifically provide for
entry of judgment against the offeror, and the offeror is willing to proceed with payment
and conclusion of the settlement, the trial court has no jurisdiction to enter final
judgment against the offeror. The court notes that rule 1.442 has been amended so that it
no longer mandates entry of judgment upon acceptance of an offer of settlement, and that
it is different in this respect from Federal Rule of Civil Procedure 68.

The court interprets Fla. R. Civ. P. 1.442(c)(3) which requires a joint proposal to
state the amount and terms attributable to each party. The court interprets
this to require a specification of the amounts to be paid to different offerees, but not
the amounts payable by each of several offerors.

Punitive Damages

The statutory presumption as to excessive punitive damages, in §768.73(1), Fla. Stat.
is overcome where the punitive damages award is almost 18 times the compensatory damages
awarded, but the punitive damages are based on clear and convincing evidence that the
defendants conduct was more egregious than the standard of wanton and wilful
disregard for the safety of the plaintiff. The Supreme Court affirms the award of $31
million in punitive damages.

The court states that punitive damages are appropriate when a defendant engages
in conduct which is fraudulent, malicious, deliberately violent or oppressive, or
committed with such gross negligence as to indicate a wanton disregard for the rights and
safety of others.

The Court approves the trial judges instruction to the jury to consider the
following factors on punitive damages: (1) an amount reasonable in relation to the harm
likely to result from defendants conduct and the harm that actually occurred; (2)
the degree of reprehensibility [ya gotta love this profession] of the
defendants conduct, its duration and frequency, the defendants awareness and
any concealment; (3) profitability and the desirability of removing that profit and having
the defendant sustain a loss; (4) the defendants financial condition and the
probable effect on it; (5) all the costs of litigation to both parties; (6) the total
punishment the defendant has or will probably receive from other sources, (as a
mitigating factor); (7) the seriousness of the hazard to the public and the
defendants attitude and conduct on discovery of the misconduct; (8) degree of the
defenants awareness of the hazard and of its excessiveness; (9) the number and level
of employees involved in causing or covering up the marketing misconduct; (10) the
duration of both the improper marketing and its cover-up; (11) existence of other civil
awards against the defendant for the same conduct.

The Court also approves the trial courts well-reasoned and detailed
order setting out its reasons for finding clear and convincing evidence justifying
the award based on those factors. And the Court holds that the appellate court correctly
carefully considered the statutory scheme and reviewed the evidence in relation to
the trial courts legal analysis and findings ....

Unfortunately, the court also notes that the legislature recently amended the statute,
effective October 1, 1999, limiting punitive damages to 3 times the compensatory damages
or $500,000 unless the defendants conduct was motivated by unreasonable financial
gain or where the defendant intended to harm the plaintiff. The court holds that these
amendments do not affect the present case.

This case contains an excellent discussion of punitive damages. The court upholds an
award of punitive damages of $50 million against CSX based on evidence that, among other
things, CSX systematically cut back its maintenance workers over a period of years to save
money, resulting in a benefit to its bottom line of $2.4 billion; filed false safety
reports; and had actual notice that the broken switch that caused the accident was
defective.

The court holds that the standard for punitive damages is the standard for culpable
negligence set out in the standard jury instructions. The requirements in that instruction
are listed in the disjunctive: a course of conduct showing reckless disregard for
human life or for the safety of persons exposed to its dangerous effects, or such an
entire want of care as to raise a presumption of conscious indifference to consequences,
or which shows wantonness or recklessness, or a grossly careless disregard of the safety
and welfare of the public, or such an indifference to the rights of others as is
equivalent to an intentional violation of such rights. The standard does not require
proof of a crime beyond a reasonable doubt.

The court also holds that it was not error to admit the widows testimony about
the loss of her husband during the trial on liability for punitive damages, because it was
necessary for the jury to understand the underlying compensatory damages claim.

The standard necessary for culpable negligence for punitive damages was met in this
nursing home case by evidence that the defendant violated §782.07(2) and §825.102,
Florida statutes. Section 782.07(2) provides that a person who causes the death of an
elderly person or disabled adult by culpable negligence under §825.102(3) commits
manslaughter ... a felony of the first degree.

Section 825.102 defines neglect of an elderly person or disabled adult in a
lengthydefinition that basically applies a standard of reasonable care to the acts of a
caregiver. The opinion contains a lengthy recitation of the defendants egregious
misconduct, repeatedly allowing the deceased to wander away, leaving his door broken in
the open position for a year and a half, and manufacturing a fraudulent document and false
testimony to cover up its conduct.

The court emphasizes the different burden of proof between a criminal and civil case,
and notes that a close civil case for punitive damages will not usually yield a
criminal prosecution.

Settlement

Thurman v. Mistovich
24 Fla. L. Weekly D1670 (Fla. 1st DCA 1999)

The parties entered into a high-low settlement agreement whereby the
plaintiff would get not less than $20,000 if the jurys verdict was for the
defendant, and not more than $70,000 if the plaintiff won. The court held that, after a
verdict in favor of the defendant, the defendant was not entitled to an award of costs.
Because of the high-low, the plaintiff was the prevailing party entitled to costs.

Sovereign Immunity

Morhaim v. State
24 Fla. L. Weekly D1809 (Fla. 3d DCA 1999)

The Third District continues its sensible interpretation of the notice requirements of
the sovereign immunity statute. Section 768.28(6)(a) requires presuit notice not only to
the government entity being sued but also in most cases to the Florida Department of
Insurance. In this case, the plaintiff served notice on the county and the department of
insurance. Later, when the plaintiff learned that the road in question was the
responsibility of the Department of Transportation, plaintiffs counsel sent a new
notice to the DOT but not to the Department of Insurance. The DOT did send a copy of the
notice to the DOI before the statute of limitations ran. The court held that this was
adequate. However, because no notice of the plaintiffs husbands derivative
claim was ever sent to the DOT, the husbands claim was barred. See Metropolitan
Dade County v. Reyes, 688 So.2d 311 (Fla. 1996).

Please remember how important it is to give notice to the government entity and to the
department of insurance of the claims of the plaintiff and anyone with a derivative claim.

Wall v. Palm Beach County
24 Fla. L. Weekly D1825 (Fla. 4th DCA 1999)

In a similar vein, even though the government entity may waive the required notice to
itself, it cannot waive notice to the Department of Insurance.